Which of the following will most likely help identify an increasing proportion of uncollectible sales?
A) accounts receivable turnover
B) the ratio of bad debt expense to sales
C) the ratio of sales returns to sales
D) the ratio of cost of sales to sales

Question

Quizplus · Accepted Answer

The ratio of bad debt expense to sales directly reflects the increasing proportion of uncollectible sales. As bad debt expense is recognized when a company estimates that some of its sales will not be collected, an increasing ratio of bad debt expense to sales indicates that the company's estimation of uncollectible sales is rising.

Which of the Following Will Most Likely Help Identify an Increasing